The United States Federal Reserve is expected to keep interest rates unchanged following its two-day key meeting on Wednesday. The ongoing Fed meeting comes amid reports that the central bank is facing unusual political pressure from the Trump administration for rate cuts. Only three US Fed policy meetings remain before Chairman Jerome Powell's eight-year stint as the world's top central banker ends.
The Federal Open Market Committee (FOMC), the Federal Reserve body responsible for setting monetary policy, in its last meeting in December, decided to cut the benchmark rate for the third time in 2025. Additional rate cuts are expected in 2026, according to experts.
What To Expect From Policy Meet?
The Fed's two-day meeting concludes on Wednesday, with policymakers expected to keep the benchmark interest rate at 3.5-3.75%. No new economic or policy projections are scheduled, but investors generally expect the Fed to pause further rate cuts until June, likely under Powell's successor.
According to Reuters, market-based inflation expectations and longer-term US bond yields show no widespread concern about the central bank's future. "It is impossible to view the actions of the next Fed chair separately from the economic environment or their influence over other FOMC members," Tim Duy, Chief US economist at SGH Macro Advisors, told Reuters.
Powell will hold his usual post-meeting press conference on Wednesday. However, it is anticipated that the focus will be less on the policy than on events between meetings. These include a Justice Department subpoena and threatened criminal probe, which prompted the central bank chief to issue a response saying it is part of Trump's campaign to pressure him for rate cuts.
US Economy
Reuters reported that economic data since the Fed's early December meeting show little change in labour market or inflation trends, providing limited reason to guide on future rate cuts. Even as job growth remained weak, the unemployment rate fell to 4.4% in December. This was mainly driven by strong economic growth and consumer spending. The Personal Consumption Expenditures Price Index, the Fed's preferred measure for its 2% inflation target, rose slightly to 2.8% in November, the report added.
When And Where To Watch Powell's Press Conference Live?
The FOMC meeting is scheduled for Jan. 27 and 28. The policy statement will be announced at 2 p.m. ET on Jan. 28 (12:30 a.m. IST on Jan. 29) at a press conference by Powell. The press conference, which follows the meeting, will be streamed live on the Federal Reserve's social media platforms, such as X and YouTube. NDTV Profit will also stream the FOMC press conference on its YouTube channel and social media platforms.
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